Directors’ remuneration report
Composition of the Remuneration Committee
The Board has appointed a Remuneration Committee of Non-executive Directors of Dairy Crest Group plc (the ‘Company‘). During the year the Committee consisted of Neil Monnery (Chairman), David Richardson (resigned 1 August 2009), Howard Mann, Andrew Carr-Locke (appointed 1 August 2009), Anthony Fry (resigned 1 January 2010 on becoming Chairman of the Board – attends by invitation only from 1 January 2010) and Carole Piwnica (Simon Oliver attended meetings by invitation only until 1 January 2010 when he resigned as Chairman of the Board). Members of the Remuneration Committee have no potential conflicts of interest arising from cross-directorships and they are not involved in the day-to-day running of the Company. The Committee also received materials, assistance and advice on remuneration policy from the Company’s Human Resources Director, Rob Tansey. The Remuneration Committee has appointed PricewaterhouseCoopers LLP (‘PwC‘) to provide advice on executive remuneration. During the year, PwC also provided other valuation and consultancy services to the Group. The Chief Executive attends all meetings and provides advice on matters other than those concerning himself.
Role of the Remuneration Committee
The Remuneration Committee is responsible for the broad policy with respect to senior executives’ salary and other remuneration. It specifically determines, within remuneration principles agreed with the Board, the total remuneration package of each Executive Director and reviews with the Chief Executive the remuneration packages for other senior executives. A copy of the terms of reference of the Committee can be found on the Company’s website.
The Committee met five times during 2009/10. Details of attendance are shown in the Corporate Governance Statement here.
Key developments
2009/10
In 2009/10, the Group delivered a strong performance despite the challenging economic environment. Adjusted profit before tax increased by 5% to £83.5 million (2008/09: £79.5 million) and cash generation was particularly strong with net debt reducing by £78.6 million, from £415.8 million at 31 March 2009 to £337.2 million at 31 March 2010. Payment of annual bonus is subject to achieving demanding short-term financial targets and personal objectives. The stretch financial targets (encompassing adjusted profit before tax and net cash generation) were exceeded in the year and Executive Directors met many personal objectives. This has resulted in bonus payments for 2009/10 both for Executive Directors and all employees who participate in the bonus scheme.
Awards under the 2007 Long Term Incentive Share Plan (‘LTISP‘) had a three year vesting period to March 2010. 50% of the total award was based on the Company’s Economic Profit (‘EP‘) and 50% was measured against the Total Shareholder Return (‘TSR‘) performance of a comparator group of companies. Dairy Crest did not achieve the minimum EP target threshold of £85 million due principally to reduced profitability over the last 2 years versus expectations in July 2007. Nor did the Group meet the TSR target threshold and therefore none of the awards will be released and all July 2007 share options have lapsed at 31 March 2010.
2010/11
2010/11 is expected to be another challenging year in light of the current economic environment. Our focus will continue to be on reducing our cost base, investing in brands and cash generation.
The Committee believes that the current remuneration framework continues to provide an appropriate link between reward and competitive performance. However, the Committee has made some adjustments in 2010, to ensure that the strategy of competitive outperformance is sustained in the current market conditions.
Key changes for 2010/11 are as follows:
- Base salary increases for Martyn Wilks and Alastair Murray will be 2%. Following an external benchmarking exercise on Executive Directors pay conducted by PwC, the Remuneration Committee concluded that the salary for Mark Allen is behind the market. Consequently the Committee has agreed that his salary will be increased by 6% to bring him closer to competitive market levels.
- There continues to be a strong focus on cost control, cash flow and profitability. Therefore for 2010/11, performance targets for annual bonus will be based on 60% on adjusted profit before tax (increased from 50%), 15% on a measure of cash generation (decreased from 25%) and the remaining 25% on personal objectives.
- In respect of long term performance, the achievement of the Company’s earnings objectives remains a key priority. The Committee has therefore decided to maintain the Earnings Per Share (‘EPS’) criteria for the 2010 LTISP awards (EP was used from 2006 to 2008). The Committee believes that EPS provides greater transparency for shareholders and participants as well as a stronger line of sight to focus participants on achieving the Company’s earnings objectives. LTISP awards for the 2010 - 2012 cycle will be based on a balance of growth in EPS (40%) and relative TSR (60%).
- In respect of pension arrangements, the UK defined benefit scheme closed to future accrual from 31 March 2010 (subject to a transitional arrangement for all members that allows service accrual to continue to accrete for an individual’s notice period from November 2009). For Mark Allen and Alastair Murray, both of whom have notice periods of 12 months, pension service accrual ceases in November 2010. In 2010/11, Executive Directors have the option to join the money purchase scheme that already exists. The employer contribution will be up to 23% of basic salary. Alternative arrangements are also currently under consideration.
Furthermore, Directors are encouraged to build a shareholding in the Company equivalent to one year’s salary and to this end would normally retain 50% of net proceeds from share plans and bonus share awards until that shareholding is achieved.
The Committee believes this 2010 remuneration structure will enable us to continue to retain and motivate a strong and experienced management team, while at the same time reflecting the current environment within which we operate, and ensuring continued alignment with shareholder interests. However, the Committee intends to review the arrangements during 2010 in respect of 2011 plans to ensure that they continue to meet the Company’s objectives in the longer term in light of the continued period of economic change.
Summary of remuneration policy for 2010
We ensure that remuneration packages contribute to the delivery of long-term shareholder value. This is reflected in the Company’s annual bonus scheme and LTISP awards which are explained in more detail below.
The remuneration structure and underlying principles on which the package is based, reflecting changes for 2010/11 are shown below.
| Objective | Basis of delivery | |
|---|---|---|
| Base salary | Reflect assessment of market practice based on role and experience. Salary increases are linked to performance as measured in annual performance review | Benchmarked against executives with similar responsibilities in companies of comparable size and complexity |
| Pension | To provide a market competitive level of provision with good flexibility while minimising risk to the Company | Until June 2006 a final salary pension scheme or cash alternative offered. From June 2006 a defined contribution scheme or cash alternative was available. No further final salary pension scheme benefits from 1 April 2010 – alternatives are the defined contribution scheme or cash alternative |
| Bonus | Ensure that annual reward is consistent with successfully achieving the short-term strategic objectives of the Group | Balance of demanding relevant short-term financial targets (profit and cash) and personal objectives |
| Deferred bonus | Ensure appropriate balance maintained between long-term and short-term reward and to build up Directors’ shareholdings in line with policy | Bonus over 50% of annual salary deferred for three years and issued in shares – conditional on employment until vesting date |
| LTISP | Encourage continuing improvement in Group’s performance over the longer term. Alignment of interest between participant and shareholders | Three year performance period. 60% subject to relative TSR conditions. 40% subject to adjusted basic EPS growth targets |
Make up of remuneration
A significant proportion of a Director’s total remuneration package is variable, being subject to the achievement of specified short-term and long-term business objectives. In applying this policy the Committee has taken account of the provisions of Schedule A of the Combined Code on Corporate Governance of June 2008 (the ‘Code’).
In the chart below we show the make up of remuneration as a percentage of the whole, given on-target performance. It can be seen that the fixed elements of pay represent around half of the maximum.
- Base salary is taken as amount paid in the year excluding any salary supplements in relation to pensions;
- Benefits are taken as the taxable benefit provided in the year;
- Pension is taken as (i) as the value of one year’s pension, i.e. transfer value of the pension accrued in the year for defined benefit schemes or (ii) the amount of Company contributions for defined contribution schemes. It also includes any cash supplements resulting from contribution caps or non-membership of any Company scheme;
- Bonus is taken as the amount that would have accrued for the year ended 31 March 2010 for on-target performance; and
- LTISP awards are based on the fair value in a manner consistent with IFRS2.
Components of remuneration
• Base salary
Salary levels for Executive Directors are reviewed annually based on an independent assessment of market practice. They are set to reflect the pay levels of executives with similar responsibilities in companies of comparable size and complexity. Base salaries for 2009/10 were frozen at 2008 levels.
• Bonus
The maximum annual bonus opportunity for all Executive Directors is 100% of annual salary. There are no current plans to change the maximum bonus percentage. Payment of the bonus is subject to the achievement of demanding short-term financial targets and personal objectives. Financial targets comprise 75% of the bonus and personal objectives 25%. From 2008/09, 40% of the bonus in relation to financial targets has been payable for on-target performance.
To ensure that an appropriate balance is maintained between long-term and short-term reward, any bonus earned over 50% of annual salary is paid in the Company’s shares and deferred for a three year period subject to continued employment.
• Long Term Incentive Share Plan
The LTISP is designed to encourage continuing improvement in the Group’s performance over the longer term. An LTISP award is payable in shares, rather than cash, to emphasise the alignment of interests between the participants and the Company’s shareholders. The LTISP has a three-year performance cycle and pre-determined performance conditions, which must be met before awards under the LTISP can be exercised. Awards under the LTISP are granted annually.
2009 awards
For the 2009 awards under the LTISP:
- 40% of the total award is based on adjusted basic EPS growth; and
- 60% of the total is measured on TSR performance against the FTSE 250 (excluding financial service companies, real estate companies and investment trusts).
Performance against both EPS and TSR is measured over a three year period.
The targets for the 2009 awards are as follows:
| LTISP Award | TSR element | EPS element | |
|---|---|---|---|
| Performance achieved | Proportion of total LTISP award vesting |
EPS target | Proportion of total LTISP award vesting |
| Upper quartile | 60% | RPI + 8% | 40% |
| Median | 18% | RPI + 3% | 12% |
| Between median and median plus 9% pa | Pro rata between 15% and 50% |
Pro rata between 15% and 50% |
2008 awards
For the 2008 awards under the LTISP:
- 50% of the total award is based on the Group’s EP. EP is defined as net operating profit less a capital charge based on capital employed multiplied by the Group’s Weighted Average Cost of Capital; and
- 50% of the total is measured on TSR performance against a comparator group of food manufacturing companies.
Performance against both EP and TSR is measured over a three year period.
The targets for the 2008 awards are as follows:
| LTISP Award | TSR element | EPS element | |
|---|---|---|---|
| Performance achieved | Proportion of total LTISP award vesting |
EPS target | Proportion of total LTISP award vesting |
| Median plus 9% pa | 50% | Maximum | 50% |
| Median | 15% | Threshold | 15% |
| Between median and median plus 9% pa | Pro rata between 15% and 50% |
Pro rata between 15% and 50% |
The list of TSR comparators for 2008 LTISP awards is as follows:
|
Associated British Foods plc Cranswick plc Glanbia plc Greencore Group plc Kerry Limited McBride plc |
Premier Foods plc Robert Wiseman Dairies plc Tate & Lyle plc Uniq plc Northern Foods plc |
The value of shares awarded under the LTISP in any financial year is subject to limits determined by the Remuneration Committee from time to time. The current annual limit for awards is 150% of base salary and the maximum awards during the year were 100% of base salary.
• Executive Share Option Scheme
The Dairy Crest Executive Share Option Scheme (‘ESOS’) was established on 30 July 1996 for Directors and certain senior management and expired in July 2006. A new ESOS was adopted at the AGM 2006 (‘ESOS 2006’). Part A is approved by the Inland Revenue and Part B is an unapproved scheme. Options are granted to participants at prices determined by the Remuneration Committee which may not be less than the market price of the shares as derived from the London Stock Exchange Daily Official List at the time of grant.
At 31 March 2010, there were no outstanding options under this scheme (2009: Nil).
• Sharesave Scheme
The Dairy Crest Sharesave Scheme was first established on 30 July 1996 and there have been seven grant phases since that date. The life of the Sharesave Scheme was extended in August 2006 to allow options to be granted until the twentieth anniversary of flotation, being August 2016. The Sharesave Scheme is open to all eligible employees and full time directors. Employees enter into an approved savings contract over a three-year term to make monthly contributions up to an overall maximum of £250 per month. At the end of the term members have the right to buy ordinary shares in the Company at a price fixed at the time of the option grant. The price at which the options may be offered may not be less than 80% of the market price at the time of option grant.A sharesave grant was made in June 2009 in which approximately 2,100 employees participated.
• Pension benefits
During 2009/10, all Executive Directors with the exception of Martyn Wilks were members of the Dairy Crest Group Pension Fund, which provides for a pension based upon an executive’s final basic salary. Bonuses are not pensionable. Benefits are restricted by a scheme earnings cap, which is calculated in a similar manner to the previous Inland Revenue pensions earnings cap. The following supplementary arrangements were in effect:
Mark Allen and Alastair Murray received a salary supplement of 20% of base salary above the earnings cap (£123,600 for 2009/10), which is included in cash allowances in the emoluments table below.
Martyn Wilks was not a member of a Company pension scheme. He received a salary supplement of 20% of base salary.
During the year, the Company closed its defined benefit scheme to future service accrual with an effective date of 1 April 2010. As part of the transitional arrangements, employees whose notice periods were six months or greater will receive service accrual up to 6 November 2010 (being 12 months from the decision to close the scheme to future service accrual). This will apply to Mark Allen and Alastair Murray. This service accrual has been included in the analysis below. On closure of the defined benefit scheme, all members were offered active early retirement terms. This allows members to draw their pension early while continuing to work for the Company as long as an election was made before 31 March 2010. Mark Allen made such an election and from 31 March 2010 receives a pension of £33,227 per annum and a lump sum amount of £221,510. Alastair Murray made no election to draw early pension payments.
After November 2010, Mark Allen and Alastair Murray will have the option to join the Dairy Crest defined contribution pension scheme or receive a salary supplement. Alternative arrangements are currently being considered and further details will be provided in due course.
• Benefits in kind
These include the taxable value of company car benefits, life assurance cover and company contributions to medical insurance plans.
• Service contracts
In accordance with best practice as set out in the Combined Code, all Executive Directors have a notice period not exceeding one year. All such Directors’ service contracts provide explicitly for termination payments in the event of termination by the Company other than on grounds of incapacity or in circumstances justifying summary termination. Payments on termination are calculated at 70–90% of the value of annual salary, benefits, pension and bonus for the notice period. In the case of Martyn Wilks and for future appointments, there is a mitigation clause in the service contract with respect to termination payments such that certain compensation payments are deferred. A summary of the service agreements of the Executive Directors is available on the Company’s website.
Details of the Directors offering themselves for election and re-election at the forthcoming Annual General Meeting are set out in the Directors’ Report here.
Remuneration of the Chairman and of Non-executive Directors
The remuneration of the Non-executive Chairman is determined by the Board following a recommendation by the Chief Executive and the Remuneration Committee in consultation with PwC LLP. Remuneration is determined by the Board, also in consultation with PwC LLP. The total fees for Non-executive Directors remain within the limit of £400,000 set out in the Company’s Articles of Association (The ‘Articles’). There are no pre-determined special provisions for Non-executive Directors with regard to compensation in the event of loss of office.
The table below sets out the Non-executive Director fees at 31 March 2010.
| Annual fees | |
|---|---|
| Non-executive Chairman | £155,000 |
| Non-executive Director (base) | £38,000 |
| Audit Committee chair | £5,000 |
| Corporate Responsibility chair | £5,000 |
| Remuneration Committee chair | £5,000 |
The information here is subject to audit, except the details on service contracts here, details of Directors’ shareholdings here and the graph on total shareholder return on here.
Directors’ remuneration for the year ended 31 March 2010
| Cash allowances | Benefits | Bonus | Remuneration (excluding payments to defined contribution schemes) | Pension payments to defined contribution schemes | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Basic salary/fees |
Pension | Other | ||||||||||||||||
| 2010 £000 |
2010 £000 |
2010 £000 |
2010 £000 |
2010 £000 |
2010 £000 |
2009 £000 |
2010 £000 |
2009 £000 |
||||||||||
| Non-executive Chairman | ||||||||||||||||||
| A Fry (Chairman from 1 January 2010) | 81 | – | – | – | – | 81 | 38 | – | – | |||||||||
| S M D Oliver (resigned 1 January 2010) | 116 | – | – | – | – | 116 | 155 | – | – | |||||||||
| Executive Directors | ||||||||||||||||||
| M Allen | 475 | 70 | 1 | 27 | 445 | 1,018 | 567 | – | – | |||||||||
| A S N Murray | 330 | 41 | 1 | 21 | 309 | 702 | 386 | – | – | |||||||||
| M Wilks | 331 | 66 | 5 | 16 | 311 | 729 | 413 | – | – | |||||||||
| M N Oakes (resigned 11 December 2008) | – | – | – | – | – | – | 441 | – | 45 | |||||||||
| 1,136 | 177 | 7 | 64 | 1,065 | 2,449 | 1,807 | – | 45 | ||||||||||
| Non-executive Directors | ||||||||||||||||||
| D Richardson (resigned 1 August 2009) | 14 | – | – | – | – | 14 | 43 | – | – | |||||||||
| A Carr-Locke (appointed 1 August 2009) | 29 | – | – | – | – | 29 | – | – | – | |||||||||
| H Mann | 38 | – | – | – | – | 38 | 38 | – | – | |||||||||
| N Monnery | 43 | – | – | – | – | 43 | 43 | – | – | |||||||||
| C Piwnica | 43 | – | – | – | – | 43 | 43 | – | – | |||||||||
| 167 | – | – | – | – | 167 | 167 | – | – | ||||||||||
| 1,500 | 177 | 7 | 64 | 1,065 | 2,813 | 2,167 | – | 45 | ||||||||||
Basic salary, benefits and bonus are defined above. Bonuses included above include the full value of any bonus payment deferred as shares. For 2009/10 this amounts to £207,813 for Mark Allen, £144,200 for Alastair Murray and £144,900 for Martyn Wilks. For 2008/09 there were no bonus payments.
Cash supplements principally comprise pension related salary supplements. Mark Allen and Alastair Murray were members of the defined benefit scheme and receive 20% of basic salary above the earnings cap. Mark Wilks is not a member of any Company pension scheme and receives a salary supplement of 20% of basic salary.
Martin Oakes resigned as a Director of the Company on 11 December 2008 and all remuneration, bonus, pension entitlement and share option disclosures for 2008/09 have been presented up to that date. He continued to be employed up to 31 March 2009 and earned a base salary of £99,745 between 11 December 2008 and 31 March 2009. His compensation for loss of office of £205,000 was paid in accordance with his contract.
Mark Allen acts as Chairman of Dairy UK. His fees of £20,000 pa in relation to these services are paid to the Company.
Service contracts
The service contracts and letters of appointment include the following terms.
| Executive Directors | Date of contract | Notice period (months) |
|---|---|---|
| M Allen | 18 July 2002 | 12 |
| M Wilks | 7 January 2008 | 12 |
| A S N Murray | 20 June 2003 | 12 |
| Non-executive Directors | Letters of appointment | Notice period (months) |
|---|---|---|
| A Fry | 15 July 2009 | 3 |
| C Piwnica | 16 October 2009 | 3 |
| N Monnery | 16 October 2009 | 3 |
| H Mann | 16 October 2009 | 3 |
| A Carr-Locke | 15 July 2009 | 3 |
Letters of appointment for all of the Non-executive Directors include a three month notice period. It is the Company’s policy that Non-executive Directors should not normally serve for more than nine years. A summary of the terms of appointment of Non-executive Directors is available on the Company’s website.
Directors’ pension entitlements
The pension entitlements of the Directors from the Dairy Crest Group Pension Fund, a defined benefit scheme, which have been excluded from the table on here, were as follows:
| Age | Length of service Years |
Accumulated total accrued pension at 31 March 2010 £000 |
Accumulated total accrued pension at 31 March 2009 £000 |
Increase in accrued pension during the year £000 |
Transfer value of increase in accrued pension £000 |
|||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| M Allen | 50 | 19.3 | 64 | 55 | 9 | 131 | ||||||
| A S N Murray | 49 | 7.2 | 29 | 22 | 7 | 82 |
The transfer value of each Director’s accrued benefits at the end of the financial year is set out below. The transfer values shown in the table have been calculated in accordance with actuarial guidance note GN11. Transfer values are determined based on financial conditions at the date of calculation including stock market values and bond yields.
| As at 31 March 2010 £000 |
As at 31 March 2009 £000 |
Directors’ contributions in the year £000 |
Movements less directors’ contributions £000 |
|||||
|---|---|---|---|---|---|---|---|---|
| M Allen | 957 | 555 | 15 | 387 | ||||
| A S N Murray | 380 | 215 | 15 | 150 |
Notes:
Length of service includes the 7 months to November 2010, reflecting the transitional arrangement based on notice period that was agreed on the closure of the scheme to future service accrual. The accumulated total accrued pension at 31 March 2010 also includes service accrual to November 2010 and, in the case of Mark Allen, represents the deferred pension prior to any reduction resulting from his decision to draw early retirement benefits and the early retirement lump sum.
Mark Allen decided to draw benefits from 31 March 2010 and will receive a pension of £33,227 pa and a cash lump sum of £221,510. Mark Allen’s accrued pension immediately before electing to draw it early was £63,931 pa (including seven months’ additional pension service). The future pension payable is less than £63,931 pa due to the application of an early retirement reduction and because some pension was exchanged for a lump sum cash payment. The transfer value of £957,000 at 31 March 2010 is made up of £735,000 in respect of pension and £222,000 in respect of the cash lump sum. Part of the increase in the transfer value over the year is due to the benefit being valued as an immediate pension rather than a deferred pension.
The £131,000 transfer value of the increase in accrued pension for Mark Allen (shown above) is made up of £111,000 in respect of pension accrued during the year and £35,000 in respect of cash less £15,000 in respect of contributions. The pension value of £111,000 is calculated based on a pension of £5,000, representing the increase of £9,000 after reductions for early retirement and exchange of pension for cash lump sum.
The increase in accrued pension excludes the increase in pension due to inflation. The rate of inflation over the year was negative. As a result, pensions have not increased from last year as it is not possible to grant a negative increase to pensions.
Directors’ shareholdings
The (unaudited) interests of the Directors at the end of the year in the ordinary share capital of the Company were as follows:
| As at 31 March 2010/retirement Beneficial |
As at 31 March 2009/retirement Beneficial |
As at 31 March 2010/retirement Deferred shares |
As at 31 March 2009/retirement Deferred shares |
|||||
|---|---|---|---|---|---|---|---|---|
| S M D Oliver | 55,000 | 55,000 | – | – | ||||
| A Fry | – | – | – | – | ||||
| M Allen* | 110,000 | 88,687 | 18,765 | 17,498 | ||||
| A S N Murray* | 135,078 | 37,806 | 14,325 | 14,293 | ||||
| M Wilks* | 18,500 | 18,500 | – | – | ||||
| D Richardson** | 22,367 | 22,367 | – | – | ||||
| H Mann | 20,000 | 20,000 | – | – | ||||
| C Piwnica | 5,000 | 5,000 | – | – | ||||
| A Carr-Locke | – | – | – | – | ||||
| N Monnery | 5,000 | 5,000 | – | – |
* These Directors are potential beneficiaries of the ESOP. In addition to the shares noted above under beneficial interests they are also deemed to have a beneficial interest in all the shares held by the ESOP (see Note 25 and Note 26).
** Holding at date of retirement
Shareholdings above exclude options under the LTISP scheme and deferred shares for Executive Directors as part-payment of bonuses are shown as a separate column. These shares are released three years after the year in which the bonus was earned. Deferred shares held at 31 March 2010 exclude any deferred shares to be issued in relation to 2009/10 bonuses. An analysis of the movement in the deferred bonus scheme, including any shares vesting, is shown below.
| Bonus year |
Year of award |
Balance 1 April 2009 |
Awarded | Dividend re- investment |
Issued | Balance 31 March 2010 |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| M Allen | 2006/07 | 2007 | 14,448 | – | 1,046 | – | 15,494 | |||||||
| 2007/08 | 2008 | 3,050 | – | 221 | – | 3,271 | ||||||||
| A S N Murray** | 2005/06 | 2006 | 934 | – | 4 | (938) | – | |||||||
| 2006/07 | 2007 | 13,359 | – | 966 | – | 14,325 |
No Director holds a non-beneficial interest in the Company’s share capital. There have been no changes in Directors’ shareholdings between 31 March 2010 and 17 May 2010. The above interests exclude any rights to acquire shares under the LTISP arrangements, which are set out below.
Long-term incentive share plan awards
LTISP performance conditions are set out on here. The performance periods commence on 1 April in each year and conclude on 31 March three years later. Actual and potential awards held by Executive Directors under LTISP at the beginning and end of the year, details of actual awards, awards vested during the year and their value are as follows:
| Year of award |
Balance 1 April 2009 |
Awarded | Exercised – retained |
Exercised – sold |
Lapsed | Balance 31 March 2010 |
Market price at original award |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| M Allen | 2006 | 32,954 | 1,737 | (21,313) | (13,378) | – | – | 525.8p | ||||||||
| 2007 | 73,379 | 5,308 | – | – | (78,687) | – | 690.8p | |||||||||
| 2008 | 150,484 | 10,887 | – | – | – | 161,371 | 328.5p | |||||||||
| 2009 | – | 154,268 | – | – | – | 154,268 | 313.7p | |||||||||
| A S N Murray | 2005 | 58,556 | 3,087 | (61,643) | – | – | – | 479.4p | ||||||||
| 2006 | 32,954 | 1,737 | (34,691) | – | – | – | 525.8p | |||||||||
| 2007 | 52,182 | 3,775 | – | – | (55,957) | – | 690.8p | |||||||||
| 2008 | 104,420 | 7,555 | – | – | – | 111,975 | 328.5p | |||||||||
| 2009 | – | 107,045 | – | – | – | 107,045 | 313.7p | |||||||||
| M Wilks | 2008 | 104,927 | 7,592 | – | – | – | 112,519 | 328.5p | ||||||||
| 2009 | – | 107,565 | – | – | – | 107,565 | 313.7p |
Notes to the LTISP table:
– On 15 September 2009, Alastair Murray exercised 61,643 options under the 2005 grant and both Mark Allen and Alastair Murray exercised 34,691 options under the 2006 grant.
– Additional shares awarded include reinvestment of dividends.
– The 2007 awards vested at 0%, the 2006 awards vested at 50.0%.
– LTISP 2008 and LTISP 2009 performance measurement and vesting periods end on 31 March 2011 and 31 March 2012 respectively. Options will be exercisable on 1 July 2011 and 29 June 2012 respectively.
– The closing share price on 31 March 2010 was £3.72 (31 March 2009: £2.63).
– There were no LTISP awards or exercises between 31 March 2010 and 17 May 2010.
Performance graph
Schedule 8 of The Large and Medium Companies and Groups (Accounts and Reports) Regulations 2008 requires companies to provide by graph an analysis of their performance over time. The graph below sets out for the five years ended 31 March 2010 the total shareholder return of Dairy Crest Group plc and the performance of the Food Producers and Processors sector of the FTSE and of the FTSE 250 index (excluding investment companies) of which the Company is a constituent member.
Dairy Crest – Relative Total Shareholder Return over five years
Directors’ sharesave options
At 31 March 2010 the Directors held the following share options under the Sharesave scheme.
| As at 1 April 2009 |
Granted during the year |
Exercised during the year |
Lapsed during the year |
As at 31 March 2010 |
Exercise price (pence) |
Date when options |
Expiry date |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| M Allen | – | 771 | – | – | 771 | 227 | 01/09/12 | 01/03/13 | ||||||||
| A S N Murray* | 719 | 874 | – | (822 | ) | 771 | 227 | 01/09/12 | 01/03/13 | |||||||
| M Wilks | – | 771 | – | – | 771 | 227 | 01/09/12 | 01/03/13 |
* Alastair Murray exited the December 2007 Sharesave scheme.
Awards granted under the Sharesave scheme in the period from 31 March 2010 to 17 May 2010 amounted to 330 (110 each for Mark Allen, Alastair Murray and Martyn Wilks). There were no Sharesave scheme exercises during this period (2009: none).
The mid-market price of the above shares as at the close of business on 31 March 2010 was 372 pence per share. During the year between 1 April 2009 and 31 March 2010 the mid-market closing price ranged from 275 pence per share to 418 pence per share.
Exercise of options
During the year ended 31 March 2010, Executive Directors exercised LTISP options and effected market sales as follows:
| LTISP number of shares |
Market price (pence) |
Gain (£) |
Retained number of shares |
Date of exercise/ sale |
||||||
|---|---|---|---|---|---|---|---|---|---|---|
| M Allen | 34,691 | 367.5 | 127,493 | 21,313 | 15/09/09 | |||||
| A S N Murray | 96,334 | 367.5 | 354,036 | 96,334 | 15/09/09 |
The aggregate gain on exercise of options by Directors in the year was £481,529 (2009: £264,344).
On behalf of the Board
Neil Monnery
Chairman of Remuneration Committee
17 May 2010